Public Bill Committee

[Mr. Peter Atkinson in the Chair]

New Clause 1

Intervention: England
‘Before section 57 of FHEA 1992, insert—
“56A Intervention: England
(1) This section applies if the Learning and Skills Council for England is satisfied as to one or more of the matters listed in subsection (2) in the case of an institution in England within the further education sector; and it is immaterial whether or not a complaint is made by any person.
(2) The matters are—
(a) that the institution’s affairs have been or are being mismanaged by the institution’s governing body;
(b) that the institution’s governing body have failed to discharge any duty imposed on them by or for the purposes of any Act;
(c) that the institution’s governing body have acted or are proposing to act unreasonably with respect to the exercise of any power conferred or the performance of any duty imposed by or under any Act;
(d) that the institution is performing significantly less well than it might in all the circumstances reasonably be expected to perform, or is failing or likely to fail to give an acceptable standard of education or training.
(3) If this section applies the council may do one or more of the things listed in subsection (5).
(4) If the council does one or more of those things, it must at the same time give the institution’s governing body a notice stating—
(a) the matter or matters listed in subsection (2) as to which the council is satisfied;
(b) the reasons why the council is so satisfied;
(c) the reasons why the council has decided to do that thing or those things.
(5) The council may—
(a) remove all or any of the members of the institution’s governing body;
(b) appoint new members of that body if there are vacancies (however arising);
(c) give to that body such directions as it thinks expedient as to the exercise of their powers and performance of their duties.
(6) The directions that may be given to a governing body under this section include a direction requiring a governing bodyto make collaboration arrangements (within the meaning of section 166 of the Education and Inspections Act 2006) with such bodies and on such terms as may be specified in the direction.
(7) Directions may be given to a governing body under this section despite any enactment making the exercise of a power or performance of a duty contingent on the body’s opinion.
(8) The council may not direct a governing body under subsection (5)(c) to dismiss a member of staff.
(9) But subsection (8) does not prevent the council, where it considers that it may be appropriate to dismiss a member of staff whom the governing body have power under their institution’s articles of government to dismiss, from giving the governing body such directions under this section as are necessary to secure that the procedures applicable to the consideration of the case for dismissal of that member of staff are given effect to in relation to that member of staff.
(10) A governing body must comply with any directions given to them under this section.
(11) An appointment of a member of a governing body under this section shall have effect as if made in accordance with the instrument of government and articles of government of the institution concerned.
56B Intervention policy: England
(1) The Learning and Skills Council for England must—
(a) prepare a statement of its policy with respect to the exercise of its powers under section 56A,
(b) keep it under review, and
(c) if it considers it appropriate in consequence of a review, prepare a revised statement of its policy.
(2) When preparing a statement or revised statement of its policy, the council must—
(a) undertake such consultation as it thinks appropriate;
(b) consider any representations made to it about the policy to be set out in the statement.
(3) The Secretary of State may give the council guidance in relation to the exercise of its functions under subsections (1) and (2), and in particular in relation to the form and content of the policy.
(4) It is the duty of the council to have regard to any guidance given to it under subsection (3).
(5) The council must send a copy of the statement or revised statement prepared by it to the Secretary of State.
(6) If the Secretary of State approves it he shall lay a copy of it before each House of Parliament.
(7) The council must publish—
(a) the statement of its policy approved by the Secretary of State;
(b) where the Secretary of State approves a revised statement of its policy, the revised statement.
(8) The council must have regard to the statement most recently published under subsection (7) in exercising, or deciding whether to exercise, any of its powers under section 56A in relation to an institution.
56C Directions
(1) This section applies if—
(a) the Secretary of State is satisfied as to one or more of the matters listed in section 56A(2) in the case of an institution in England within the further education sector, and
(b) the Secretary of State is satisfied that the circumstances are such that it would be appropriate for the Learning and Skills Council for England to do one or more of the things listed in section 56A(5) in relation to the institution.
(2) In such a case the Secretary of State may give to the council such directions as he thinks fit as to the exercise of the council’s powers under section 56A.
(3) Where the Secretary of State gives the council a direction under this section, he must at the same time give the council a notice stating the matter or matters listed in section 56A(2) as to which he is satisfied.
(4) The council must comply with any directions given to it under this section.
 (5) Where the council does a thing listed in section 56A(5) in relation to an institution in compliance with a direction under this section—
(a) the council must give the institution’s governing body a copy of the relevant notice under subsection (3), and
(b) the requirement to give a notice under section 56A(4) does not apply.”’.—[Bill Rammell.]

Brought up, and read the First time.

Bill Rammell: I beg to move, That the clause be read a Second time.

Peter Atkinson: With this it will be convenient to discuss the following: Government new clause 2 —Intervention: Wales.
Government amendments Nos. 4 to 6 and 3.

Bill Rammell: It is a pleasure for us to reassemble in Committee. I am sure that I express the collective wish of the Committee when I say that I hope to continue with the rate of progress that we saw on Tuesday.
 I am pleased to introduce the Government new clauses and Government amendments. More than £11 billion a year of public investment throughout England and Wales reflects the importance of the further education system to individuals in helping fundamentally to change their lives. It also reflects the importance to employers and the nation of providing the skills that are vital to secure a successful and vibrant economy. Such investment must be protected in the interest of learners and the public purse.
In the past six years, we have seen significant improvements. Success rates are up by 20 percentage points—a fantastic rate of progress. In the current inspection cycle, more than 90 per cent. of colleges inspected so far have been graded satisfactory or better. That is significant progress, but we need to go further.
 The policy intention in Wales is to raise the bar for quality in FE provision by 2010, with 65 per cent. or more of FE colleges gaining inspection grade 2 or above. We are introducing proposals that will enable Welsh Ministers to initiate remedial action in relation to an institution in the FE sector in certain prescribed circumstances, such as when there is evidence that the provider is failing to meet the needs of its learners or is performing significantly less well than might be expected.
In England, we have had Sir Andrew Foster’s report and our “Further Education” White Paper. The Bill will help us to take the action needed to continue to transform the FE system. Nowhere is there a clearer demonstration of that transformation than in our intention to ensure that there is sustainable development and improvement in provision. During the debates in another place, Baroness Morris said that
“we are not against rigour or driving up standards.”—[Official Report, House of Lords, 27 February 2007; Vol. 689, c. 1530.]
We want to go further than that. The Government intend to ensure year-on-year improvements in the available provision through a robust intervention strategy that will provide the “ultimate deterrent” referred to by my right hon. Friend the Member for Torfaen (Mr. Murphy) during Second Reading.
As well as supporting colleges and providers to develop and improve, we will ensure that any pockets of underperformance in the FE system are tackled quickly, robustly and fairly. In saying that, let me be clear that we are talking about a very small proportion of providers; overall, FE colleges are doing extremely well. However, those intervention powers are vital if we are to continue making important improvements in the UK’s skills base.
Our commitment to ensure that all provision is good or improving and to eliminate all inadequate or unsatisfactory provision by 2008 remains firm. Crucially, however, we have listened carefully to the thoughtful and constructive debate on our intervention proposals during the Bill’s passage. Indeed, I have had conversations across the Floor of the House with Opposition Members. It is in the interests not only of learners but of colleges and the reputation of the whole FE system that we get this right, so I have taken full account of the representations that I have received. The amendments that I have tabled, as they apply to England and Wales, directly address those concerns.
We need to ensure that both the Learning and Skills Council in England and the Welsh Ministers, as the bodies responsible for commissioning and funding FE, have the full range of powers that they need to secure best quality and best value for money. The recent report on collaboration between schools with sixth forms and further education colleges shows that there is a need in Wales to encourage and promote greater collaborative approaches among post-16 providers. The provision for Welsh Ministers to be given the power to direct governing bodies of FE institutions to make specific collaboration arrangements with maintained schools or other education bodies will directly contribute to ensuring that that happens.
Let me also be clear that our White Paper commitment to eliminate inadequate provision in England is unchanged. The LSC must have the power to intervene if governing bodies do not take the appropriate action in those rare instances in which a failure of leadership and management leads to inadequate provision. The clause will give the LSC the power to affect a move towards dismissal by enabling it to direct the governing body to initiate dismissal procedures in respect of a particular senior post holder. Our intention has always been that the governing body would follow its usual dismissal procedures if the LSC directed the dismissal of a post holder. However, in response to concerns raised we have now made that explicit. I hope that that will be welcomed by the Opposition.
As we have stressed during debates here and in another place, those powers of intervention would be utilised only at the end of a long process that allows time for colleges to improve. The LSC’s draft intervention policy document was made available to Members, together with the Government amendment tabled on 6 June. That draft policy sets out the initial thinking and shows the procedures that the LSC would follow before invoking any statutory intervention powers. It also sets out very clearly the important safeguards that would be in place. The LSC’s draft intervention policy document shows that intervention would be considered only in serious cases and only where the college had not tackled the problem that had been identified.
It might be helpful if I summarise the four-stage process that we envisage. The first step is the annual commissioning dialogue. Each year, the LSC discusses with every college the full range of learning provisions offered and how that contributes to delivering successful outcomes for learners, employers and the local community. A review of the quality of provision and the identification of areas for development is an integral element of that dialogue and is an opportunity for both the college and the LSC to highlight any concerns as they arise so that the appropriate remedial action can be taken before problems escalate.
Through that discussion, however, and where supported by evidence, such as inspection reports, success rate data or evidence of financial problems, the second step is for the LSC to consider the capacity of the college to address the underperformance robustly and swiftly, and to determine whether it is appropriate to issue a notice to improve. During the third step, the LSC would co-ordinate work with a range of agencies to support the college in delivering the improvements required by the notice to improve. Usually, we would expect that phase of support and improvement to be completed within 12 months.
 The fourth and final step of the process would be intervention, if necessary. Escalation to intervention procedures would be considered only where the LSC was satisfied about one or more of the triggers identified in proposed new section 56A(2) to the Further and Higher Education Act 1992, which might include the failure of a college to meet the relevant conditions under the notice to improve. Exceptionally, intervention may be triggered by circumstances that place immediate and serious risk to learners and/or public funding, or by a direction by the Secretary of State. In respect of any direction from the Secretary of State, let me be clear that we have introduced a requirement for the LSC to supply the governing body with a copy of the notice that it receives when complying with a direction from the Secretary of State.
I stress that throughout each step of the process, if the governing body can demonstrate that it is, or is capable of addressing the problems, the LSC would not take action to exercise its statutory powers. I know, for example, that much of the previous debate focused on specific concerns about the proposed provisions as they might apply to the dismissal of senior post holders, but, as I have just outlined, the prior steps of the process are intended to support the college in managing and securing its own quality improvement. That is very much the thrust of our proposals.
In bringing forward new clause 1, I have sought to make it clear that the governing body, as the employer, is responsible for all decisions regarding any dismissal, by giving the LSC the power to direct the governing body to put into effect its procedures for considering the dismissal of one of its senior members of staff. We would expect any governing body that received such a direction to commission a full and thorough investigation and to consider whether there is a case for dismissal in the light of its findings. The governing body alone would be responsible for the outcome of that process.
When we make new orders for the instruments and articles to government to apply to further education corporations in England, we will make them consistent with the requirement to conduct an investigation to provide any evidence for the consideration of dismissal procedures.
However, as the governing body would be obliged to comply with such a direction, we believe that these powers still gives us the rigour and reassurances that we need to ensure that any and all instances of failure in the system will be challenged robustly and effectively. Of course, we would expect that in the vast majority of cases, the governing body would act without the need for external intervention. That is very much the thrust of our argument. But if governing bodies are not robust enough to deliver what we need, something should be in place to ensure that that weakness is remedied. Most reasonable people would support that conclusion.
I can offer even greater reassurances in respect of some of the concerns that have been expressed. In those rare and extreme circumstances where intervention proves to be necessary, I have now also made explicit on the face of the Bill the requirement for the Learning and Skills Council to give the governing body notice citing which aspect of section 56A(2) applies; the reasons why it is satisfied that this applies; and to set out its reasons for the actions it proposes to take. The governing body would then have the opportunity to respond before any action was taken.
Again, if the governing body is able to demonstrate that the problem is being or is capable of being addressed, the Learning and Skills Council would not exercise its statutory powers. In Wales, the Welsh Ministers are required to take intervention action by order. Similar to the requirement for a written notice from the Learning and Skills Council, this order of the Welsh Ministers would explain which of the conditions for intervention is satisfied and will satisfy the requirement for a written record of the action taken and the reasons for it.
As I said, the Learning and Skills Council has set out its proposed intervention policy document in draft to aid the discussions during Committee and beyond. This draft is, of course, subject to the passage of the Bill and the outcome of the consultation with the sector. This means that all interested parties will have the opportunity to refine the policy further before it is finalised and approved by the Secretary of State. Once the policy is approved the Secretary of State will then lay it before the House. Similarly, the requirement that Welsh Ministers consult on their statement of policy will ensure that appropriate consultation takes place with stakeholders, particularly further education representatives.
 I end by summing up the key points I have made in response to what is an exceedingly important element of this Bill. Our goal of eliminating underperformance from the further education system is a bold and justifiable ambition. That is why I make no apology for saying that the Learning and Skills Council must be able to intervene effectively in those extreme circumstances where the college has not itself addressed underperformance in a sufficiently rapid and robust manner.
I must also stress that the powers of intervention proposed by this clause are wholly consistent with employment and human rights legislation; they do not undermine the role of governing bodies; and perhaps most importantly they safeguard the interest of learners by supporting our ambition to eliminate poor and inadequate provision from the further education system. We have a duty to every learner in the FE system to make sure that they benefit from high quality and ever improving provision. As my right hon. Friend the Member for Torfaen said on Second Reading,
“It is wrong to assume that every principal in the country is excellent—occasionally there will be difficulties.”—[Official Report, 21 May 2007; Vol. 460, c. 1010.]
We need the powers to deal with that situation.
The support for a robust, fair and transparent interventions policy is clear and there is a consensus on this issue. The Association of Colleges supports this as do many Members of both Houses. Indeed, I have received a letter from John Brennan in which he offers the unconditional support of the AOC to this Government amendment as the AOC now considers we have achieved a workable basis for LSC intervention, which is compatible with employment legislation, consistent with the moves towards self-regulation and will give emphasis to the drive to embed within the sector a culture of responsibility for its own standards and performance. Similarly in Wales, I am pleased to say that Forum welcomes the fact that Ministers have listened to its views too.
 I should like to take this opportunity to thank the Association of Colleges for its contribution to this amendment, and in particular for its help in the development of the LSC’s draft policy document. Through consultation, debate and dialogue we have achieved an acceptable way forward. We have gone a long way to allay the concerns of hon. Members and I therefore commend the new clauses and the amendment to the Committee.

John Hayes: It is good to be back and considering these matters. John Ruskin, speaking of 19th-century industrial Britain, said that
“the sky is covered with gray cloud;—not rain-cloud, but a dry black veil, which no ray of sunshine can pierce...It looks more to me as if it were made of dead men’s souls”.
I thought that we ought to have some Ruskin to raise the standard of debate in the Committee. When these proposals were first introduced, there was a cloud hanging over FE colleges—perhaps not quite the same kind as Ruskin’s, but certainly a dark cloud—which was why the proposals were greeted with such hostility. Indeed, it was why members of all parties in the House of Lords took the view that the powers being granted were unnecessary. It would be quite inappropriate for a dark cloud to hang over our successful further education sector.
The Minister listened and, as I said earlier in the Committee, he was generous in allowing representations to be made to him and, more than that, in entering dialogue with, as he said, the AOC, other interested parties and Opposition Members. I pay tribute to the tone and tenor of the way in which he has handled the whole Bill and particularly this part of it. However, I remain largely unconvinced, and I shall explain why.
The Minister has set out the four elements of the process that would ensue should it become necessary, in the view of those who will have the power, to intervene in respect of an FE college and to take the very serious step of dismissing its senior managers, governors or principal. I simply do not believe, based on the evidence, that those additional powers are necessary.
 The Minister generously started his comments by acknowledging that 90 per cent. of FE colleges were deemed by Ofsted to be satisfactory or better. He then, in my judgment with equal sagacity, said that the Government were determined to drive up standards and eliminate underperformance. But underperformance in the sector is rare, by Ofsted’s and his own admission. There is no evidence that it is growing and no evidence that Ministers have had to use their existing powers to intervene in respect of college principals to deal with underperformance.
As the Minister knows, when I asked him how often the Government have had to intervene using their existing powers to sack college principals since those powers emerged in statute, he revealed that they have never been used. Powers that have never been used are to be increased and transferred to the LSC. Performance is deemed to be satisfactory or better in the overwhelming majority of colleges and, where it is not, we have been offered no evidence to suggest that it is due to inadequate leadership or that the powers that the Government are seeking to create would be likely to solve the problem.
 We have reached a point at which a sensible and generous Minister is dancing on the head of a pin. I say that because in the new clause reintroduced following the defeat of Lord Adonis in the other place—the first time that that gentleman had ever been defeated in the Lords, though one fears he may have further disappointments to face in coming weeks—the Minister seeks to amend the proposals in such a way as to satisfy his critics. He has been generous, as I have said, but the powers are now so qualified, so convoluted and so byzantine that one wonders whether they are worth introducing at all. So we have a Minister who has listened and reacted, but he is now reintroducing a clause that, frankly, is not worthy of this Bill, this Committee or this House. Ministers have powers at present and if they choose to use them, they should use them. There is a need for a long-stop power, where public money is involved and the public interest is concerned. The Minister is right that standards and rigour of quality are about learners and learners’ interests. Were there no powers of that kind, and had the Minister brought through this Committee a proposal to take such powers, he might have attracted the support of Opposition Members. However, let us be clear; we are talking about greater powers and their transfer to the LSC.
 I have one or two further questions, as if my previous words were not enough to damn the clause. First, the regulatory impact assessment states that there will be an additional burden on the LSC in terms of administering the intervention strategy. Will the Minister estimate the cost of that additional burden and tell us whether new staff will be involved to implement that strategy? Also, because he has a brilliant team of civil servants assisting him, he must have a notional view of how often those powers will be used and how many colleges are in such a state that he expects these powers to be implemented with regard to them.
Furthermore, what are the proposed savings in the Department for Education and Skills of transferring the intervention strategy to the LSC? There must be a concomitant saving, and I am sure that the Minister has those figures at his finger tips. How can we judge the effectiveness of powers that have never been used? Why do powers that have never been used need to be extended to college managers? I ask that question specifically because this issue is not just about principals; it is now about senior managers, too. Finally, does the Minister envisage these powers being used more often, once they have gone to the LSC, than they have been thus far?
I repeat that the Minister has been generous. He has approached this matter with good will. I have absolutely no doubts about his commitment to improving standards. However, one does not get rid of underperformance by taking these types of steps. One gets rid of underperformance by celebrating excellence and examining how it can be exported and emulated. That is the way to improve those colleges that still have some way to go.
On the basis of what we have heard and unless we hear much more, then I am afraid that, with some hesitation because of the good dialogue that we have had, that the Opposition may wish to test the will of the Committee on this matter, subject to the debate that will now ensue.

Sarah Teather: I recognise and welcome the steps forward that the new clause makes. It is significantly better than the original draft of the clause in the Bill that first went through the other place. Nevertheless, I must say that I have some sympathy with the statements that the hon. Member for South Holland and The Deepings has made. I am still not clear about the purpose of the clause.
First, as the hon. Member for South Holland and The Deepings has said and as the Minister has acknowledged, the powers in the Further and Higher Education Act 1992 have never been used, so why does the Minister want to transfer those powers to the LSC? Is it because he believes that they should have been used? If so, why did he fail to use them? How many colleges does he envisage that the powers will be used on? I also sympathise with the comments that the hon. Gentleman has just made about the increased burden on the LSC, especially at a time when I know that the Minister has been pushing hard to try to streamline the administrative burden on that organisation.
Moreover, as we move forward with Leitch, it is not immediately clear to me that the LSC is obviously the body that should take responsibility for this matter. In many colleges, the LSC contributes only 50 or 60 per cent. of the total sum to run the college. If we are dealing with public money, and other money that comes by way of contributions from individuals or private industry, is it necessarily right, as we progress with Leitch and expect more of a contribution from individuals and industry, to give the power in question to the Learning and Skills Council? What are the implications for colleges whose governors are provided for by a charitable foundation, such as those dealing specifically with disabilities and special needs?
I would welcome clarification on several points. I welcome new subsection (8), but I am not really clear what new subsection (9) provides for. The Minister said that it would force colleges to initiate dismissal procedures, but will the Learning and Skills Council give in its direction the employment law grounds for dismissal of the individual? It is not clear to me exactly what is meant. I should also be grateful for more clarification of new subsection (2)(d), which seems to be extremely vaguely worded. I am not clear precisely what would constitute an institution’s
“performing significantly less well than it might in all the circumstances reasonably be expected to perform”.
Perhaps the Minister will explain that a little more clearly.
I shall listen to what the Minister has to say, but I remain unconvinced about the purpose of the clause. If the Conservatives press the matter to a vote, we are minded to support them.

Austin Mitchell: I rise to dispel the impression that Labour Members are all sitting silently waiting for the dawn of socialism on 27 June and that they all admire the Bill. It is right to express a note of dissent on the new clause, which, frankly, worries me.
I can see that a power of the kind that the new clause provides for is necessary to deal with the financial abuses that developed in the halcyon days to which the hon. Member for South Holland and The Deepings has referred—I was going to call him my hon. Friend, because we used to go on joint fishing expeditions to find small fish that had escaped the common fisheries policy. As to whether I agree with him in this case, I must point out that many of the financial abuses that the new clause would allow the Learning and Skills Council to deal with were in the past cleared up only very slowly, and often in face-saving ways. The new clause would enable them to be dealt with more directly. My worry is more general, because the Learning and Skills Council has considerable powers and the colleges, in the main, dance to its tune.
I have been very concerned and have written to the Minister, the Learning and Skills Council and colleges about the fall of more than 1 million in recruitment to what might be called leisure or non-vocational courses. An article in The Guardian’s education supplement on Tuesday, entitled “Why have adults suddenly decided to stay away from colleges?” dealt with that. The leisure courses that they are deserting are those that enrich the lives of older students, and have traditionally been offered in the colleges or by the Workers Educational Association, which is in a much weaker state these days. Such courses might be dismissed as trivial, if they are on, for example, local history. Some of the other types of courses affected are
“distance learning...courses that aren’t included in the National Qualifications Framework and thus don’t attract public subsidy...language and leisure courses”
and even some professional courses. Those all enrich people’s lives, but there has been a fall in recruitment.
That aspect of the matter is in effect covered by clause 20, which requires colleges to consult affected groups, and the groups that I am concerned about have been badly affected. However, this is an instance of the way in which colleges all dance—indeed, have been forced to dance—to the tune of the Learning and Skills Council, since it decided to concentrate spending on vocational qualifications for those in the 16-to-19 and 19 and older age groups. That ties colleges down in a way in which they have not been tied down before. The LSC, which controls the purse strings, has adequate power to ensure that colleges comply with Government priorities, and they are no more than priorities—there is no mention of dropping courses, although many have been dropped. To maintain courses, however, colleges will need a degree of freedom, and we must ensure that they have more power and responsibility than they would have if they were faced with the threat of draconian intervention by the LSC.
 I refer particularly to new subsection (9), which the Liberals, surprisingly, glossed over. They are not making a courageous stand for academic freedom or college independence by saying that they will listen eagerly to what the Minister has to say. Let us be clear about this: will their party stand up for what it believes? Liberal Members cannot give us their usual equivocation, saying, “On the one hand, there’s A, on the other hand, there’s B, so let’s wait to see what Minister says,” because he has already said it. New subsection (9) is a threat to academic freedom. In effect, it says that any lecturer who makes trouble and who is a bloody nuisance, and I have known several examples at Grimsby college, which is now Grimsby institute of further and higher education—

Ian Cawsey: So have I.

Austin Mitchell: My hon. Friend should be aware that carers are going to be asked to take more responsibility and to treat the old more gently than he appears prone to do.
 One lecturer who taught my daughter was, frankly, a nuisance in the college, but he was right to raise questions about expenditure, although he was eventually kicked out. If the LSC decides that a college must push out a lecturer who attracts public attention, that is another threat to colleges’ academic independence and freedom. It is over-egging the threat to academic freedom to supplement the powers that colleges already have—they were overused in the long dispute over the silver book contract, when those who stuck to the old terms of service were precluded from getting pay increases, which was a restriction on them—with a power to allow outside intervention against anybody who breaks surface and becomes publicly concerned, and about whom there is some kind of agitation.
I can see the case for the proposed powers in respect of financial abuses, which it is difficult for governing bodies to control and which have certainly arisen. Although I am glad that colleges now work in a much freer atmosphere, financial fiddles are always possible and must be controlled, so the LSC needs a power to intervene to deal with them. However, I cannot see why we need such powers in respect of the courses that colleges provide or the people they employ. That is a threat too far.
 I will sit down now, but not before demonstrating my own gutlessness, as distinct from that of the Liberals, by saying that I will listen with eager attention to what the Minister has to say to convince me on this worrying issue.

Bill Rammell: We have had a good exchange of views. The hon. Member for South Holland and The Deepings started by quoting John Ruskin and talking about clouds and rain.

Austin Mitchell: That is the state of the Tory party.

Bill Rammell: I actually thought that he had prior notice of the torrential rain in Harlow last night and the fact that my house had flooded, but that was clearly not the case. He went into a flight of fancy that was not justified by the substance of our proposals. He talked about hostility in the further education sector in respect of our original proposals; given what actually took place, that was unjustified. We rightly stated our desire to retain a power of intervention, and there was then a reasoned debate with colleges and representative bodies that expressed concerns on the issue. We reached a conclusion with which the Association of Colleges, the body that represents FE colleges, is extremely satisfied, so I am struggling to understand why it does not satisfy the official Opposition.
 We are right to maintain that, in extreme circumstances and when all else has failed, we need powers of intervention. Let me be clear, however, and reiterate what I said at the beginning of the process: our strong preference is for the college and the governing body to take responsibility throughout the four-stage procedure for tackling underperformance and for improving performance.

Angela Watkinson: Among the measures that will be implemented before extreme action is taken, does the Minister include sharing best practice with successful further and higher education colleges? A successful one in my constituency, Havering college, has a strong head and a stable governing body. It is over-subscribed and has innovative courses; I am sure that it would be only too pleased to share that good practice with an underperforming college, to help to avoid the extreme action for which the Bill provides.

Bill Rammell: I strongly agree with the hon. Lady. During the four-stage process, there will usually be a period of about 12 months for the college to improve following a notice to improve. It will be down to the Learning and Skills Council, with the Quality Improvement Agency and perhaps neighbouring colleges, to provide the support to help the college and the governing body to tackle underperformance. The proposals are not directed at trying to ensure that colleges fail; they are crafted to ensure that the college takes responsibility for tackling the problem itself. In addition, as the hon. Lady eloquently set out, we will do everything in our power to ensure that others can come in and support that process.

John Hayes: There are already well established procedures to do just that. In extreme circumstances, such as a case of gross financial mismanagement, which the hon. Member for Great Grimsby identified,  or of highly inappropriate behaviour, the Secretary of State can intervene and dismiss a college governor. As for improvement, there are any number of bodies, ranging from the LSC to the standards unit of the Minister’s Department, the Centre for Excellence in Leadership, Lifelong Learning UK and the Institute for Learning, that can help colleges in that respect. Why more powers?

Bill Rammell: The hon. Gentleman was wrong in his assertion that the proposed powers already exist. The Secretary of State does not have the specific power to direct the starting of the process for the dismissal of a senior post holder, which is an important deterrent. I shall come on to explain that.

Sarah Teather: Will the Minister define “senior post holder”? It obviously refers to someone beyond the level of principal. How senior? Is the level of management defined in any way?

Bill Rammell: It is. For the record, the scope of the power would be limited to senior post holders designated under the instruments and articles. Typically, that would include principals and directors, not teaching staff or lecturers. I will comment on that when I respond to the remarks of my hon. Friend the Member for Great Grimsby. The contention of the hon. Member for South Holland and The Deepings, who is leading for the Opposition, is that the powers are not necessary in any circumstances and that, in every eventuality, we should trust the college and the college governing body to tackle such problems. I think back to the experience in the late 1980s and early 1990s, immediately after incorporation. If the Government had had these powers for intervention in extremis, there would not have been the kind of problems and abuses that existed at that stage. For the record, the Conservative party was in power then and responsible for such issues.
 The hon. Gentleman said that the existing powers have not been used. I have no problem with that. In fact, I hope that the new powers will not be used. They are powers to deter and to ensure that the governing body and the college take responsibility for their actions.
I repeat that we have had an important and reasoned debate. The Government have responded to concerns that have been expressed, and we have managed to satisfy the Association of Colleges, which has written to me explicitly supporting our proposals. In those circumstances, I do not understand why the Opposition cannot support our position, unless they are in the business of opposition for opposition’s sake.
The hon. Member for Brent, East asked whether it was right that the Learning and Skills Council should have responsibility for such matters given that there is a policy thrust towards self-regulation. It is certainly the case that the proposals that Sir George Sweeney made for self-regulation—proposals that I asked him to put forward—envisage circumstances in which colleges take greater collective responsibility for self-policing, for want of a better phrase. That would be good and healthy. Just as I want individual governing bodies to take responsibility for dealing with poor performance, I would regard it as a healthy development if colleges collectively could take on that responsibility.
 However, we would still want to have the longstop power, in extremis, if a college governing body, the Association of Colleges collectively or whoever else has not dealt with an issue. Because of our responsibilities for the public purse and the public interest and, most importantly, to the learners who are affected, we would want longstop powers in extremis.

Sarah Teather: I asked specifically about a situation in which not all the funding is channelled through the Learning and Skills Council. If the majority of the funding for a particular college were no longer channelled through the council, would it be appropriate for the council to be the body that directs the removal of governors or college principals?

Bill Rammell: Even under the demand-led approach that we are moving towards—we envisage most of the funding going through the demand-led process—there would still be a relationship with the Learning and Skills Council. Funding would still come from the council. If it will not have the ultimate power of intervention, and if we want to protect the public purse and the public interest, who will take on the responsibility?

Sarah Teather: The Secretary of State.

Bill Rammell: From a sedentary position comes the cry, “The Secretary of State.” It is clear that through these processes the Secretary of State has the power to direct the Learning and Skills Council to tackle a problem of poor performance through intervention. The Secretary of State also has the power to disagree and stop the council from intervening. I believe that that provides the public accountability reassurance requested by the colleges and by Opposition Members.
The hon. Lady referred to subsection (9) and spoke about employment law and the responsibilities of the Learning and Skills Council. The proposals that we have put forward make it explicitly clear that, under employment law, the governing body is responsible for the situation. The council’s responsibility is to identify poor performance, and, if it has concerns about the conduct of a senior post-holder, to direct the governing body to consider a dismissal procedure. However, under contracts and employment law, the responsibility would reside with the governing body.
My hon. Friend the Member for Great Grimsby made several points. I shall deal directly with his concerns because I know that he has a long-standing interest in further education and adult education funding. This Government have not cut funding for the further education sector. We have increased funding in real terms by 50 per cent. during the past 10 years. What we are rightly doing is shifting priorities. Skills for life provision for people who have literacy and numeracy problems has to be a priority. In addition, the roll-out of the train to gain programme makes the incredibly radical commitment that, for the first time in this country, if an adult in the workplace does not have their first full level 2 qualification—the equivalent of five GCSEs—the state has a responsibility and duty to step in and ensure the relevant provision is provided. That is what we are doing and where we are prioritising funding. I acknowledge that because we are doing that much more, even with the increased funding in those priorities areas, there is relatively less money available than there has been for non-vocational education.
I am not saying that those types of courses are not valuable; they are incredibly valuable. However, in those circumstances and given that there has to be a limit to how much money the Government can give, we must ask the individual to contribute more. We need to shift the culture of learning in this country so that individuals make that commitment voluntarily. My hon. Friend referred to older learners. Even with the changes that we have made, on the last available figures we have double the number of over-60s studying at further education colleges compared with 10 years ago. I hope that gives him some reassurance.
Finally, in response to my hon. Friend’s concerns about the threat to academic freedom, I genuinely do not support the view that this proposal is a threat to academic freedom. The powers will prevail in tightly constrained circumstances and most certainly will not apply when a lecturer complains about expenditure by a college governing body or a principal.

Angela Smith: As the student of the lecturer to which my hon. Friend the Member for Great Grimsby referred, the situation that he mentioned was one that I referred to on Second Reading. Having the Learning and Skills Council in place would have been helpful then—it was pre-incorporation at that time—because the governing body of the college completely and utterly failed to deal with the situation. In fact, it removed the lecturer and supported college management. If a body over and above the governing body had existed to which that situation could have been referred and to which the inquiry that was recommended by the governing body could have been referred, the necessary action could perhaps have been taken.

Bill Rammell: I wholly agree with my hon. Friend. I know that, from her previous experience before she was a Member of Parliament, she brings great commitment and knowledge of the way that further education colleges operate on the ground.
 I meant to refer to a question asked by the hon. Member for Brent, East about 56A(2)(d), which relates to the evidence base that will be used in informing judgments. The evidence base will include inspection judgments, and assessments against the LSC’s minimum performance levels. The framework for excellence that is in development will, over time, provide a more coherent and simpler framework by which the performance of a further education college can be judged.

Sarah Teather: I thank the Minister for that helpful answer. However, I am still not clear about exactly what will constitute “significantly less well” than would be expected in the circumstances. Will there be a specific grade or a number of grades over time under Ofsted? I am not clear about what safeguards colleges will have so that they will not be forced into the procedure.

Bill Rammell: I said earlier that the Learning and Skills Council has published a draft intervention strategy. We will continue to consult on that. Within that framework what constitutes poor performance is clear. We will undoubtedly listen to concerns about the  degree to which we have got that right and will ensure that the draft intervention strategy addresses those issues. As I said earlier, that will ultimately be placed before the House. It will be crystal clear in what circumstances poor performance will be tackled.
We have had an important debate. This issue and the matter of foundation degree awarding powers have been the two most contentious elements of the Bill. Any reasonable person would conclude that the Government have listened and responded, and that they have given reassurance as to the manner in which the powers will be used. We have to retain the right to intervene in extremis—in exceptional circumstances in which a governing body has not dealt with a major, fundamental concern. The Association of Colleges says clearly and explicitly that we have listened and got it right, and have found an acceptable way forward. If the measure is acceptable to the AOC, I hope that it will be acceptable to Opposition parties.

John Hayes: The Minister has been dancing, albeit elegantly, on the head of his pin. Section 57 of Further and Higher Education Act 1992 gives explicit powers in extreme circumstances to the Government, through the Secretary of State, to intervene in a college in the way that he has described. We have heard from the Minister that that is a power that he never expects to use; that it is a deterrent, not a threat. We have also heard that the LSC could be told by the Secretary of State that it is not allowed to use the power in particular circumstances. The power is not only unnecessary; it is not worthy to be a part of the Bill. I think that we should test the mood of the Committee as to whether it should remain in the Bill.

Question put, That the clause be read a Second time.

The Committee divided: Ayes 8, Noes 5.

Question accordingly agreed to.

Clause read a Second time and added to the Bill.

New Clause 2

Intervention: Wales
‘(1) Section 57 of FHEA 1992 (intervention) is amended as set out in subsections (2) to (4).
(2) In subsection (2) (conditions for intervention), for paragraph (d) substitute—
“(d) they are satisfied that the institution is performing significantly less well than it might in all the circumstances reasonably be expected to perform, or is failing or likely to fail to give an acceptable standard of education or training.”
(3) After subsection (5) insert—
“(5A) The directions that may be given to a governing body under this section include a direction requiring a governing body to make collaboration arrangements (within the meaning of section 166 of the Education and Inspections Act 2006) with such bodies and on such terms as may be specified in the direction.”
(4) After subsection (6) insert—
“(6A) The Welsh Ministers may not direct a governing body under subsection (5)(c) to dismiss a member of staff.
(6B) But subsection (6A) does not prevent the Welsh Ministers, where they consider that it may be appropriate to dismiss a member of staff whom the governing body have power under their institution’s articles of government to dismiss, from giving the governing body such directions under this section as are necessary to secure that the procedures applicable to the consideration of the case for dismissal of that member of staff are given effect to in relation to that member of staff.”
(5) After section 57 of FHEA 1992 insert—
“57A Intervention policy: Wales
(1) The Welsh Ministers must—
(a) prepare a statement of their policy with respect to the exercise of their powers under section 57,
(b) keep it under review, and
(c) if they consider it appropriate in consequence of a review, prepare a revised statement of their policy.
(2) When preparing a statement or revised statement of their policy, the Welsh Ministers must—
(a) undertake such consultation as they think appropriate;
(b) consider any representations made to them about the policy to be set out in the statement.
(3) The Welsh Ministers must lay before the National Assembly for Wales a copy of any statement or revised statement prepared by them under this section.
(4) The Welsh Ministers must publish any statement or revised statement prepared by them under this section.
(5) The Welsh Ministers must have regard to the statement most recently published under subsection (4) in exercising,or deciding whether to exercise, any of their powers under section 57 in relation to an institution.”’.—[Bill Rammell.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 7

Report on inspection bodies etc.
‘(1) The Secretary of State shall lay before Parliament an independent report to Parliament on the operational efficiency and effectiveness of organisations responsible for the monitoring and inspection of further education institutions.
(2) The Secretary of State shall by order define those organisations subject to such a report.
(3) A report under subsection (1) above shall be published annually for the first five years after this section comes into force.’.—[Mr. Hayes.]

Brought up, and read the First time.

John Hayes: I beg to move, That the clause be read a Second time.
We have spoken today about bodies that have relationships with FE colleges in all kinds of ways—inspecting, funding, monitoring, planning, setting standards and helping them to improve. They were highlighted by Sir Andrew Foster, whose report into these matters revealed that there were no fewer than 17 such bodies. Since his report, one has gone and  another has been added, so there are still 17. He described that as “a galaxy” of oversight, inspection and accreditation, and argued that they needed to be rationalised, co-ordinated and focused. He went on to say that the inspection regime of FE colleges could be lightened by rationalising the process and moving to a system under which colleges regulated themselves to a much greater extent. He argued for deregulation—self-regulation, I should say—by degree.
The Opposition strongly support that proposition and the new clause should be seen in that context. It proposes that the Secretary of State should
“lay before Parliament an independent report to Parliament on the operational efficiency and effectiveness of organisations responsible for the monitoring and inspection of Further Education institutions.”
It further proposes that the Secretary of State should define those organisations and that
“a report shall be published annually for the first five years after this section comes into force.”
We are anxious to put some independent, empirical information before the House on the size of the galaxy that Sir Andrew Foster has identified. We want to know how many satellites there are in the galaxy and the day-to-day effect that they will have on FE, so that we can move to the lighter-touch regulation—self-regulation—that Andrew Foster recommended and which we support.
We believe that colleges can do more. We think that there is untapped capacity in FE. We celebrate the skills of leadership and teaching in that sector. We suspect—more than that: we are confident—that they feel inhibited from exercising their skills; they feel restricted by bureaucracy and burdened by over-regulation.
For the benefit of the Committee, I shall say more about Andrew Foster’s report. He said:
“Currently, the rigours of proving the quality of provision to the plethora of interested bodies, including qualification bodies, are in danger of detracting from the need for continuous improvement and the ownership of that by FE colleges...The world of FE college oversight is crowded. There is a galaxy of oversight, inspection and accreditation bodies.”
As I said, he argued that they needed to be “rationalised, co-ordinated and focused.”

Roberta Blackman-Woods: Would the hon. Gentleman help the Committee by giving examples of the sort of bodies and organisations to which he refers?

John Hayes: I would be delighted to do so, but I did not want to tire the Committee unduly. I have a list; it is in the report. It comes immediately after the reference to the “galaxy of oversight”. When speaking of a galaxy, Sir Andrew Foster mentions awarding bodies, the Qualifications and Curriculum Authority, the Institute for Learning, Lifelong Learning UK, the Centre for Excellence in Leadership, the Learning and Skills Development Agency and the Quality Improvement Agency, local learning and skills councils, the standards unit of the DFES, sector skills councils, regional development agencies, local authorities, Jobcentre Plus, the Higher Education Funding Council for England, the Learning and Skills Council, the Quality Assurance Agency, the Adult Learning Inspectorate, which disappeared soon after being criticised by the Government, and Ofsted.
All those bodies are, of themselves, significant. They all do good work. Some are essential to the relationship between Government and further education, and some are vital to improving standards. The problem is the immense overlap between them. Not only is there duplication, but the feeling among FE colleges—the hon. Lady, with her immense experience in these matters must have encountered it as much as I have—is that they are forced endlessly to jump through hoops, sometimes the same hoops by different people, and sometimes for an uncertain purpose.
How often have members of the Committee met FE college principals and senior managers who say that they spend a great deal of their time collecting or collating data, but are not sure why? I suspect that any commercial organisation—and I have no dogmatic reverence for the commercial sector—looking at the matter would want to rationalise the process in the way that Andrew Foster recommended. That is not my analysis; it is his. It is not my report; it is the report that resulted from the Government asking an independent person to consider those matters. The hon. Lady is a perfectly reasonable member of the Committee and of this House, but we might, through this new clause, ask for a report back to Parliament on what the impact of all of this is on the daily life of colleges.

Roberta Blackman-Woods: The general point about making an efficient regulation system is a good one. What I was not clear about was what specifically the hon. Gentleman would suggest should be taken out of the current system of regulation, and which of those bodies that he identified should be taken out of the FE sector.

John Hayes: The Government took the view that the adult learning inspectorate should go. That was just after the adult learning inspectorate was damning about the Government. In its final report, the inspectorate was critical of the Government’s record on skills. I do not want to be too prescriptive about that. Far be it for me to describe in detail precisely which of the requirements on colleges is most burdensome. However, if we move to self-regulation, that means by definition reducing some of the burden of regulation on others. If we are going to let FE grow up, we must be adult about that process.

Sarah Teather: I shall make this point, which will save me from making a speech, and help to speed up the Committee. I have great sympathy with the point that the hon. Gentleman is making. In response to the point made by the hon. Member for City of Durham, given that the report was commissioned by the Government, is it not for the Government to respond to the recommendations of Sir Andrew Foster’s report? I do not see any need to put the matter on the face of the Bill, but the hon. Gentleman makes a good point. I would like to see the Minister make regular statements to the House about progress on the rationalisation of those bodies.

John Hayes: I fear that the relationship between the official Opposition and the Liberals is becoming too close. I am becoming worried that every time the hon. Lady rises, I agree with her. There is a moving together of the Opposition parties, at least on the subject of further education. However, that might not feature during the course of the Bill, so I will not offer a hostage to fortune. She is right, of course; it is not up to me to list which bodies would go and what form the new regime would take after regulation, as the hon. Member for City of Durham knows.
However, what is absolutely clear is that since Foster, the burden of regulation has not altered significantly. We still have a large number of bodies, and regular reports of duplication and repetition from colleges. We do not have a blueprint for self-regulation of the kind that I want to see. I am disappointed that the Bill does not do more in that regard. That is one of the reasons that I was initially so hostile to the part of the Bill that we have just debated. I accept that the Minister has mitigated, to a considerable degree, that part of the Bill, but it is a bit rich, in a world that gives FE colleges more responsibility, to have a Bill which at least in one important respect gives more power to those who have oversight of them.

Angela Watkinson: Does my hon. Friend agree that any conclusions about the future and functions of the institutions he listed should arise from the results of the report and that the conclusions should come at the end of the report rather than at the beginning?

John Hayes: Precisely. And it is for the House and Members to consider what I described as independent and empirical evidence. We are asking in the new clause for a proper analysis of this. We do not claim that we have all the answers but we know the direction in which we wish to travel. My hon. Friend is quite right. Once we have that report there should be a debate about how we move forward on its results. I am more confident about the capacity of FE than some others may be. I have more belief in the leaders and teachers in FE.

Phil Hope: The hon. Gentleman has made some sweeping statements about how he wants to remove bureaucracy, but rather dishonestly from my point of view, he has refused to say exactly what that would entail. I have just received, regrettably, a copy of the submission to the shadow Cabinet from the Conservative economic competitiveness policy group, “Skills Training for a More Competitive Economy”. It makes no mention of any of the changes that he suggests need to be made, but states:
“the flow of funds should be from the DfES to the trainee’s local authority, and from the local authority, on behalf of an individual trainee, to a training provider”.
Perhaps the hon. Gentleman would like to explain how the system he suggests would work in a way that reduces bureaucracy on further education colleges.

John Hayes: It would be quite wrong for me to speak on behalf of my right hon. Friend the Member for Wokingham (Mr. Redwood) about the report that he published. Indeed, its relevance to the clause is pretty thin, given that it is not about FE college management or FE college regulation. What I can say with confidence about that report is that it is absolutely right  in wanting to slim down the funding and management process in FE. It is absolutely right in its analysis of the paucity of the Government’s policy in respect of driving up skills.
The Under-Secretary, who is a diligent Minister and a good Member of this House, must regard the figures for apprenticeship enrolments—his own Government’s figures—with a certain degree of shame. Now that he has read that first report, perhaps he will take the trouble to read the report that I published today on that subject. It shows not only that the number of people who are not in education, employment or training has grown by 15 per cent. since the Government came to office—

Peter Atkinson: Order. We are having a battle of reports, and it is going rather wide of the new clause. After that little political knockabout, I should be grateful if we could get back to the subject.

John Hayes: The Under-Secretary was tempting me down the road of exchanging claims about the Government’s record on skills. You are right, Mr. Atkinson. If we are to deal with the problem of NEETs, those young people whose lives have been blighted and whose dreams have been shattered, we need an FE system that is fit for purpose. That means an FE system that is confident, forward looking and highly focused. That would be best served in an atmosphere of self-regulation where the bureaucracy that surrounds FE was reduced. That is not my consideration. That is the consideration of most of the college principals I speak to and certainly it is the thrust of Sir Andrew Foster’s report.
To that end, our new clause 7 suggests that we look at those matters closely and that that examination be reported back to this House so that Members can make a judgment on how we move forward in that endeavour. I think that that is uncontentious and in line with Sir Andrew Foster’s considerations and, indeed, with the stated opinions of Ministers, who have said that they want greater self-regulation in colleges. I find it hard to believe that the Minister does not want that kind of empirical analysis, and impossible to conceive that he does not want that information reported back to the House. I look forward eagerly to him embracing the new clause as a helpful and positive addition tothe Bill.

Bill Rammell: I might have to disappoint the hon. Member for South Holland and The Deepings. He started by making an incorrect assertion; he said that Sir Andrew Foster’s very good report talked about 17 inspection and oversight bodies, and that one has been added and one taken away. That simply is not true. Two have been taken away. To claim that there has been no substantive change is completely at odds with the reality given that we have merged two inspection bodies, which have a major impact on FE colleges, to reduce their number from two to one.
I thought that there was a very interesting interchange, involving my hon. Friend, the Under-Secretary, about the report produced by the right hon. Member for Wokingham. I will take your counsel, Mr. Atkinson—all I would say is that, in the last two years, I have not met one FE college principal who has urged me to give funding responsibilities back to local authorities. If the hon. Gentleman believes that there is support for such a proposition, perhaps he can bring it forward.
Returning to the matters before us, I agree very much that the operational efficiency and effectiveness of all organisations involved in FE and training is vital. As we said, in our further education White Paper, we are committed to looking at the scope for further simplification, and all elements of the learning and skills landscape are kept under review. We are committed to continuing to seek further efficiencies.
The hon. Gentleman referred to Sir Andrew Foster’s report, which drew attention to the number of bodies. As I said earlier, we have since merged Ofsted and ALI so that now only one body inspects FE institutions, rather than two. We have also removed the Learning and Skills Development Agency. Also, as Foster suggested, roles have been clarified, as we described in last year’s “Further Education” White Paper, which was the right response to Sir Andrew Foster’s report. The remaining bodies have clear and distinct roles and responsibilities, and although we expect partners to work together, I do not believe that their activities overlap.
 The hon. Gentleman has failed to recognise how the landscape continues to change as part of our ongoing reform agenda. The 17 bodies that Foster discussed are organisations with monitoring, inspection, improvement and standard-setting roles, which clearly are very important. Foster set them out as three groups: inspectorates, of which there were three, monitoring bodies, of which there were six, and those that help the sector improve and thus bring greater success to learners, of which there were eight. We have streamlined the first group already so that there is Ofsted for FE and the QAA for HE. We have spoken about foundation degrees already and about maintaining the role for the QAA, which is of paramount importance. In that debate, I did not hear calls from the Opposition to do away with the QAA or to merge its role; indeed, there was an insistence on the importance of that role. However, on this part of the Bill, the Opposition, looking for some cheap shots, argue differently.
The second group includes local authorities, regional development agencies and sector skills councils. Again, on Tuesday, the hon. Gentleman pointed out the importance to the learning and skills system of those bodies, and there was explicit and strong support from the Opposition for the sector skills councils. However, again, in this part of the debate, a different tune is played. It is also important that we are clear that those bodies are far more partners, bringing influence to bear, than bodies set up to regulate individual providers. We have already debated their importance and their role in delivering appropriate choice for young people and demand-led provision to meet the skills challenge. I know that the hon. Gentleman agrees with that.
 The third group reflects our commitment to drive up standards and the importance of providing both expertise and support to the sector as a whole, as part of the wider reform agenda. But that group, too, has been streamlined; the DFES standards unit no longer exists in a separate form and the QIA has been established to simplify and support quality improvement across the sector.
When we consider the matter in the abstract, it is possible to call simplistically for further rationalisation. On one level that is attractive but, when we begin seriously to examine the detail, we often reach different conclusions. I shall give an example of that. I considered, and asked officials to consider, the possibility of merging the Learning and Skills Council and HEFCE, and I concluded that, were we to go down that route, we would create the largest funding and commissioning body outside the former Soviet Union. Given that, I do not think that it would be a sensible move to make. With respect, some of the calls for simplification are driven from a simplistic basis.
We are making changes and bringing about further rationalisation—that is not rhetoric. We are also working with the further education system as the proposals for self-regulation are developed. We as a Government, I as the responsible Minister, and the Secretary of State asked the further education body to come up with those proposals. Sir George Sweeney, as the chair of the self-regulation steering group, is working and consulting on self-regulation plans—work rightly being done by the sector, for the sector. We are also putting forward new freedoms for highly performing colleges, including action to develop collective sector ownership of quality improvement, including identifying and managing poor performance. I am confident that, if and when Sir George makes other proposals for any of the relevant bodies, they will be actioned where appropriate.

John Hayes: Will the Minister let the Committee know whether that analysis includes a measurement of the impact of bureaucracy on colleges, whether he has had an interim report on that and when he expects George Sweeney’s work to be reported back to Parliament so that Members of the House can play a role in debating and considering the issues?

Bill Rammell: I hope that it will report back within a relatively short period, to Ministers and then to the House. There is also a bureaucracy reduction group, which is making significant progress. As an example of that, the number of documents sent out by the Learning and Skills Council to colleges between January and March this year was 60 per cent. lower than in the same three months last year. It is a simply unsustainable contention that progress is not being made.
I turn to the hon. Gentleman’s point about annual reports. I genuinely do not believe that the new clause is necessary, as robust mechanisms already exist to hold both Ofsted and the LSC to account for how they discharge their responsibilities. Both have a statutory duty to publish annual reports and for the reports to be laid before Parliament. The LSC must ensure that is makes the best use of its resources when carrying out its duties, and the chief inspector of Ofsted must perform all his functions efficiently and effectively.
Parliament also recently established new governance arrangements in the form of a statutory board for Ofsted to hold the chief inspector to account for its work. The bureaucracy reduction group, to which I referred a moment ago, produces an annual report on the progress of our large non-departmental bodies. Important progress is being made and accountability structures and reporting mechanisms are in place. That should provide the reassurance that the hon. Gentleman is looking for.
As well as that, we said on Tuesday that we would return to the matter of efficiency savings. I want to set the record straight: the creation of the Learning and Skills Council was a significant step forward for the further education sector. We would not have had such a degree of progress in improving performance were it not for the work that the LSC has undertaken. It brought much-needed coherence to post-16 learning, with year-on-year improvements in performance, and it makes more than £50 million of year-on-year savings compared with its predecessor bodies, which existed when the Conservative party was last in government, when more money was spent on bureaucracy and administration than today. We therefore know that we have saved the equivalent of £50 million a year by merging the TECs and the Further Education Funding Council. Since 2001-02, the percentage of total LSC expenditure spent on administration has gone down from 4.6 to 1.9 per cent. That clearly represents the ongoing commitment of both the Government and the council to ensure that as much funding as possible gets to the front line of FE.
 The theme 7 restructuring will save a further £40 million a year—savings that are already being redirected to the front line. We have always made it clear that that is the same £40 million that has been mentioned frequently during the Bill’s passage through this House and the other place. The £40 million is a combination of the statutory and non-statutory changes dealt with in “Agenda for Change” theme 7 and the measures in this Bill. I am talking about the abolition of 47 local learning and skills councils, the creation of a regional structure, non-statutory local partnership teams and a slimmer national office, facilitating reductions of 1,100 staff and 600 non-executives.

John Hayes: It is important that the Minister has clarified that, because there was doubt on Second Reading and during earlier discussions in Committee. I want it to be crystal clear. The Minister has now said that the £40 million is the £40 million is the£40 million—there is no additional £40 million. Is that the £40 million reported in the 2006 annual report?

Bill Rammell: I have made this point on numerous occasions. The £40 million refers to both the theme 7 restructuring and the changes included and anticipated within this Bill. If the hon. Gentleman is in any doubt about that, I urge him to talk to the Learning and Skills Council staff, who have gone through a very difficult restructuring process, in which 1,100 posts have been removed from the system. That, plus associated reductions in administration and rationalisation of premises, results in the £40 million savings, so the cumulative administrative savings since 2001 come to £500 million, which rightly has been realigned to support learners and students. We will also continue to expect efficiency gains each year in order to put more money back into front-line provision. The Government are asking all non-departmental public bodies to reduce their administrative costs by 5 per cent. each year.
 All that is in stark contrast to the erroneous picture that the Opposition painted on Second Reading. All of it falls dramatically short of the £1.8 billion that the Conservative party erroneously claimed was the figure for LSC administration and bureaucracy. There was clearly an organised operation on Second Reading. Three or four Conservative MPs cited that figure in, in my view, a deliberate attempt to misrepresent the situation. The actual amount that is being spent on administration and bureaucracy, having been reduced significantly, is £220 million. To exaggerate the sum for administration and bureaucracy ninefold is a bit rich, even by the Opposition’s standards of dodgy accounting.
 I understand—I have done some work on this—that the figure that the Conservatives reached was established by including the sums spent in 2005-06 on learner participation, learner support, local intervention and development, capital and other programmes. If the Conservative party is really saying that, for example, education maintenance allowances, which have brought about an unprecedented step change in participation at the age of 16, amount to bureaucracy and administration, it needs to talk to the young people who, at the age of 16, are receiving such significant support.

Robert Wilson: I want to pin the Minister down on this issue if we have time. He speaks glowingly of the Learning and Skills Council, so can he give the Committee a commitment today that the LSC will remain in more or less its current form for the remainder of this Parliament?

Bill Rammell: The commitment that I can give is this. If people look at the Foster report, the Leitch report and what the Government have said, they will see that there is a consistency about our belief that the Learning and Skills Council should continue to develop and evolve. The idea that we make progress by upping sticks, ripping up structures and starting again is not the way forward. We should be very firm in that view.

It being twenty-five minutes past Ten o’clock, The Chairmanadjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at One o’clock.